A coalition of civil society groups has joined forces to challenge government’s plan to draw from the oil and gas Heritage Fund to finance the free senior high school policy.
The Civil Society Platform on Oil and Gas is asking the government to immediately abandon its decision to “raid the oil and gas Heritage Fund”.
In a statement released in Accra on Wednesday, the civil society group said the current figure of 9% that is set aside on net petroleum revenues as a heritage for future generations was reached after intense negotiations and broad national consultations, hence it will amount to an act of bad faith if the achieved consensus is altered without recourse to the people of Ghana.
The Heritage Fund is an endowment reserve established to “support the development for future generations when Ghana’s petroleum reserves have been depleted”, the Petroleum Revenue Management Act of 2011 explains.
The Petroleum Act also provides that 21% of annual oil revenues should go into a Stabilisation Fund- to support the economy in dire times – while 70 per cent should be used to support the budget.
The group also rejects the suggestion that the children of today are the future generation referred to in the Petroleum Revenue Management Act, explaining that the future generation is the generation unborn, and who are unlikely to meet the country’s oil wealth by the time they are born.
Yaw Osafo Maafo
Senior Minister, Yaw Osafo Maafo, revealed Wednesday that government would review the Heritage Fund component in the Petroleum Management Act in order to use the proceeds to finance President Nana Akufo-Addo’s Free Senior High School (SHS) policy.
According to Dr Yaw Osafo Maafo, the decision has become necessary because the government wants to invest significant revenue generated from the oil industry to fund major sectors like education since it has the potential of building a good foundation for the country.
However, the coalition of civil society groups points out that at the current production levels and world market prices, the Heritage Fund is not likely to yield more than $25 million a year, and so once the accumulated fund is exhausted in the first year of the free SHS programme, which will certainly be the case, the annual Heritage streams will be woefully inadequate in meeting the free SHS expenditure, raising serious questions about its sustainability.
They want the government to re-think the policy as currently conceived.
Lazy man’s option
Dr Steve Manteaw
A policy analyst at the Integrated Social Development Center (ISODEC), Dr. Steve Manteaw has kicked against government’s move to fund the free Senior High School policy from the Heritage Fund.
He argued that it is unwise to spend the Heritage Fund on recurrent expenditure and that “won’t yield the benefits that we want.”
But according to Dr. Manteaw attempts to fund the policy from the Heritage Fund is worrying and must not be countenanced adding “it is a lazy man’s option to a difficult task,” in an interview with Accra based Citi FM on Wednesday.
Dr. Manteaw added that hearing the Senior Minister suggest that the Heritage Fund will be the source of funding for the free SHS policy he got “scared.”
“I get scared because we risk returning to the era of Gold mining where we spent everything. In fact we even sold our gold share in the AngloGold Ashanti to use it to pay salary. One may say that well, but in this case we are using it to finance education which is a good thing. Yes it is. But it is a recurring expenditure item. We are going to spend the Heritage Fund on recurring expenditure and I don’t think that will yield the kind of results that one wants to see in the economy, in a way that benefits future generations,” said Dr. Manteaw.
He said if the money is used on infrastructure, future generations can build their lives on the strength of the infrastructure they meet.
“So I am worried,” he said explaining that, that does not suggest that “we are opposed to the free SHS” but using the Heritage Fund on it is not the way to go.
He further urged the government to be more innovative in looking for ways to fund the policy.